When a mobile home park's owner proposes to convert it from space rentals to resident ownership, a local agency must "consider" the results of a survey of resident support. Residents have never had the definite right to prevent conversion by a vote -- not even under the new SB 510, which allows (but does not require) local agencies to disapprove conversions based on lack of majority tenant support. But resident surveys do carry some weight. How much?
In 218 Properties v. City of Carson, California's Second District Court of Appeal considered two conversion applications, filed in 2009, in which majorities of survey respondents opposed conversion. Although SB 510 was not binding for cases of that vintage, the court viewed the newer law as "instructive on what the Legislature may have envisioned all along."
On that basis it found the Carson City Council properly disapproved a proposed conversion at the Park Granada Trailer Lodge, owned by 218 Properties, LLC, where 20 of 26 renters answered the survey and all 20 opposed conversion. However, it agreed with the trial court that the council should have allowed conversion of 225-space Imperial Avalon park, where only 82 residents responded to the survey: 46 against, 18 in favor, and "18 did not state an opinion".
In mobile home park conversions, the very first sale of a previously rented space removes the whole surrounding park from local rent control. (After that first sale, state-level protections, which may be less strict, still limit rent increases for low-income tenants in conversions under Government Code Sec. 66427.5.) State law therefore requires a survey of residents' wishes as part of a local review to consider whether the park owner's true purpose in beginning to sell spaces is to switch entirely to resident ownership (viewed as legitimate) or only to end the application of local rent control (viewed as a "sham").
Reviewing pre-2014 conversion law, the court cited Colony Cove Properties, LLC v. City of Carson (2010) 187 Cal.App.4th 1487 and Goldstone v. County of Santa Cruz (2012) 207 Cal.App.4th 1038 for the rule that local agencies are entitled to base some part of their conclusions on the residents' wishes. It cited Chino MHC, LP v. City of Chino (2012) 210 Cal.App.4th 1049 for the countervailing rule that (in its own paraphrase) "a local agency may rely on the survey to find the conversion is a sham, but it may not make that finding based solely on a lack of majority support among the residents for the conversion." Under Chino, it said, either majority disapproval or the landlord's subjective wish to avoid rent control was not enough to stop a conversion.
In light of those cases plus the implications of SB 510, the court considered not only the surveys from the Park Granada and Imperial Avalon parks, but the overall realism of the respective owners' plans to convert to resident ownership. At the larger Imperial Avalon park, it said, the owner "expected to sell 25 to 35 percent of the park's lots to current residents in the first 180 days" -- but that was unlikely at Park Granada, where all the survey respondents opposed conversion and all or most residents were low-income. Lacking "overwhelming" evidence that the Park Granada property would truly convert to full resident ownership, the court agreed the council had acted properly in disapproving that conversion.
Turning to an alternative argument by the city of Carson, the court found the Council also could not properly reject the Imperial Avalon conversion based on inadequacies in its required Tenant Impact Report. It agreed with the trial court that the Carson council could not properly second-guess a finding by the city's planning commission that the report was complete, and that if the council wanted more information it should have asked the owner for it before declaring the report insufficient.
In concurring, Presiding Justice Tricia A. Bigelow relinquished her prior dissenting opinion in an unpublished 2010 case, Carson Harbor Village, Ltd. v. City of Carson, Case No. B211777, which, she wrote, was later denied review by the Supreme Court. She had argued that Sec. 66427.5 as it then stood did not allow a local agency to reject a conversion based on opposition in a residents' survey. Now, she wrote, in light of subsequent rulings and developments, "that view will no longer carry the day," and at any rate "Cases going forward... will need to be addressed under the new statute."
The case is at http://www.courts.ca.gov/opinions/documents/B241969.PDF.
Staff reports from the Carson Planning Department on the parks are at http://carson.ca.us/content/files/pdfs/planning/sr/2010-03-09/71207.pdf and http://ci.carson.ca.us/content/files/pdfs/planning/sr/2010-02-23/mobl.pdf.
